Industry News

Federal Corp. establishes subsidiary in the United States

The Taiwan based Tire Company, Federal Corporation has set up a subsidiary in Torrance, California to fulfil the increasing demand for tires arising from the North American market. Federal Tire North America L.L.C., officially opened earlier this month on May 1st and is expected to support company’s various dealers and distributors operating in the country.

With the establishment of this wholly owned subsidiary, the company plans on identifying and learning about the tire market scenario in America, followed by tracking the automobile trends in the country. The unit is further expected to enhance advertising and plan marketing strategies for the company.

The Chairman, Jamie Ma said, “The unit does not have warehousing, because the Taipei, Taiwan-based firm doesn’t want to interfere with its existing customers’ businesses.” Mr Ma added that the construction of the company’s second plant in Taiwan, with a capacity of producing 6 million passenger car and light truck tires per year has been completed and further plans the production of passenger car, SUV and Light Truck tires is expected to start by this fall.

According to a recent report published by TechSci Research,United States Tyre Market Forecast & Opportunities, 2020’’ United States automobile market is the second largest automobile market in the world, with a motorization rate (including passenger cars and commercial vehicles) of more than 790 vehicles per 1,000 individuals, in 2014 and due to this high motorization rate the replacement tire segment accounted for more than 80% share in the United States tire market during the same year. Passenger car tire segment accounted for the largest volume share of more than 80%, in the market, followed by light commercial vehicle, medium & heavy commercial vehicle, OTR and two-wheeler tire segments. Major tire players operating their tire manufacturing facilities in the US include Bridgestone, Goodyear, Continental, Pirelli, Michelin and Yokohama.

TechSci research believes that the strategic move by the company to set up a dedicated subsidiary for the American market is due to the rising demand of tires in the country. Furthermore, this step is anticipated to facilitate a rise in the market share of the company in United States tire market thereby supporting an overall growth of the company globally.

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